Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential
B. higher; potential
C. higher; higher
D. lower; higher
Answer: B
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An example of the commodity substitution bias in the calculation of the CPI is a price increase in
A) turkey when the price of chicken doesn't rise. B) a GPS unit versus a AAA map book. C) a 2014 Toyota Camry versus a 2005 Honda Civic. D) etexts versus used books bought through Craigslist. E) new homes because people's incomes have increased.
Which of the following statements correctly characterizes the distribution of colonial wealth?
a. Colonial wealth was distributed equally across the population. b. While the distribution wealth was highly concentrated in the South, New England , the Middle colonies had very equal wealth distributions. c. Wealth inequality tended to be greatest in colonial cities. d. A permanent underclass of free poor people developed during the colonial period.
In order to change the money supply, the Fed might use which of the following tools?
A. Dual mandate B. Reserve requirement C. Fiscal policy D. Deficit spending
If the U.S. real exchange rate is greater than 1, then there is the possibility of arbitraging by buying foreign goods to sell in the U.S
a. True b. False Indicate whether the statement is true or false